HRG has seen “modest growth” in the UK over the last six months despite a 16 per cent fall in pre-tax profits.
The TMC, which now bills itself as a corporate services company, saw profits fall to £11.4 million for the six months to the end of September – down from a profit of £13.6 million for the same period in 2012. Although underlying pre-tax profit (which excludes one-off costs) was up from £15.6 million to £16 million year-on-year.
Total revenue for the group fell slightly to £168.4 million from last year’s figure of £168.9 million, as HRG suffered from weakness in Europe and Asia. On the brighter side, HRG said that there was growth in its North American business.
Chief executive David Radcliffe said that HRG had “achieved steady progress” during the first half of its financial year when the company focused on “continuing to evolve our offer and, at the same time, the measures to further improve our efficiency”.
“During the first half, we have made good progress against these short and longer-term priorities, whilst ensuring that we continue to deliver good value to our clients,” he said.
“Notwithstanding that, we expect market conditions to remain similar to the first half for the remainder of the year; we see brighter prospects for the coming years driven by the actions we are taking and underlying market conditions.”
HRG said that there had been continued “signs of recovery” in its UK business with a rise in client activity and spending.
“This is largely explained by the new business wins secured in the second half of last year, including Unilever, Centrica, Clifford Chance and various UK government departments,” said the company.
HRG said that the proportion of rail tickets booked by its UK clients was growing faster than hotel or flight sales.
“Rail transactions now account for more than a third of all transactions booked in the UK,” said HRG in its financial report.
“This mix change may be explained by the expansion of our business with the UK government and clients seeking lower cost, better value alternatives to air and hotel.”
HRG said that Lloyds Banking Group was “one of several clients that renewed and extended their relationship”. Lloyds is now using HRG’s Spendvision service to offer expense management tools to corporate clients.